Private transfers with incomplete information: A contribution to the "altruism-exchange motivation for transfers" debate

Eli Feinerman () and Edward J. Seiler ()
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Eli Feinerman: The Department of Agricultural Economics and Management, The Hebrew University of Jerusalem, P.O. Box 12, Rehovot 76100, Israel
Edward J. Seiler: Bates White and Ballentine, LLC, 2001 K Street, Washington, DC 20005, USA

Journal of Population Economics, 2002, vol. 15, issue 4, 715-736

Abstract: We examine the role of altruism in determining optimal transfers from a principal (a mother) to selfish agents (her children) in return for attention services. Transfer-attention contracts are studied in a setting in which informational asymmetries arise from the inability of a parent to determine the extent of her children's selfishness. We find a predominating exchange motive for transfers in the symmetric informational regime we study. However, both altruism and exchange are important motives under asymmetric information. We show that altruism facilitates transfer-attention exchange arrangements with certain trade partners under incomplete information, but diminishes trade with others.

Keywords: Intergenerational transfers; mechanism design; altruism; exchange (search for similar items in EconPapers)
JEL-codes: D11 D64 D82 J13 (search for similar items in EconPapers)
Date: 2002-11-25
Note: Received: 19 November 2000/Accepted: 17 May 2001
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Citations: View citations in EconPapers (10)

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